AUDJPY Holds Above 113.00: Carry Trade Momentum Returns Despite BOJ Intervention Threats

Forex

Summary:

AUDJPY is trading around the 112.8–113.3 region after recovering from recent intervention-driven volatility. The pair continues to benefit from strong AUD carry demand and structural yen weakness....

BUY AUDJPY

EXP

PENDING

113.200

Entry Price

114.500

112.200

113.359 +0.194 +0.17%

Pips

PENDING

112.200

Exit Price

113.200

Entry Price

114.500

Market Overview

AUDJPY is currently fluctuating near 113.2 after rebounding from recent lows near 112.2 triggered by suspected Japanese intervention. Despite short-term volatility, the broader bullish structure remains intact as the pair continues trading above the 100-day EMA. The macro backdrop still strongly favors AUDJPY upside. The Reserve Bank of Australia recently raised interest rates to 4.35%, maintaining a relatively restrictive policy stance, while the Bank of Japan remains cautious despite gradual normalization efforts.

This rate differential continues supporting carry trade demand into AUDJPY. At the same time, elevated oil prices linked to Middle East tensions are weakening the yen structurally because Japan remains heavily dependent on energy imports, while Australia benefits from commodity exports. Although intervention risk remains present after Japan reportedly spent nearly $35 billion supporting the yen last week, markets increasingly view these interventions as temporary volatility events rather than sustainable reversals.

Market Sentiment

Market sentiment remains cautiously bullish. Traders continue favoring AUDJPY as one of the strongest carry-trade pairs in G10 FX due to persistent yield divergence between Australia and Japan.

However, bullish momentum is no longer aggressive. Intervention fears near higher levels such as 114–115 are creating hesitation and encouraging profit-taking on rallies. This means the market is shifting from momentum chasing toward dip-buying behavior.

Importantly, repeated rebounds after intervention dips show that buyers remain confident in the broader structural trend. Unless the BOJ signals faster tightening or intervenes aggressively again, traders are likely to continue viewing pullbacks as temporary corrections.

Technical Analysis

AUDJPY Holds Above 113.00: Carry Trade Momentum Returns Despite BOJ Intervention Threats_1

On the M15 timeframe, AUDJPY is consolidating above the key 113.00 support region after recovering from the sharp intervention-driven sell-off earlier this week. Bollinger Bands (20,2) are tightening after previous volatility expansion, indicating stabilization and preparation for another directional move.

Price is holding near the middle Bollinger Band, suggesting that bearish momentum has weakened significantly.

IKH (9,26,52) shows Tenkan-sen crossing upward toward Kijun-sen while price attempts to hold above the lower cloud boundary. The future cloud is flattening rather than widening bearish, reflecting improving short-term bullish conditions.

Stochastic (5,3,3) has crossed upward from oversold territory, confirming recovering momentum.Key resistance now stands at 113.60 and 114.20, while support remains at 112.25 and deeper near 111.50. A sustained hold above 113 increases the probability of another bullish leg higher.

Trade Recommendation

Entry: 113.20

Take Profit: 114.50

Stop Loss: 112.20

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